The IT Talent Shortage

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The dearth of American IT professionals has given high-tech workers the leverage to command premium salaries and perks from companies desperate to attract personnel. Recent reports suggest that as many as one-half of all high-tech, highly skilled jobs in the U.S. will remain unfilled. The shortage has prompted many within the industry and on Capitol Hill to call for substantial increases in H-1B visas, which allow skilled foreigners to work in the U.S. for up to six years.

"It is absolutely necessary that we do this," says Ranjay Gulati, professor of organization behavior at Northwestern University's Kellogg Graduate School of Management. "Without such technical talent, firms cannot innovate, develop, or even compete in our ever-changing competitive landscape. The H-1B visa limit is an artificial constraint on our economy's innovation and growth."

Help Wanted

Stories of companies trying to combat critical labor shortages are legion. At Cornell University, for example, the average salary for engineering undergrads is $51,000 plus a signing bonus of $2,000 to $5,000. As a gimmick to gain attention, one firm even advertised in Cornell's student newspaper the preposterous offer of a $200,000 salary plus a BMW. "Many companies have decided that throwing money at students is the best way to recruit high-tech workers today," says Mark Savage at Cornell's engineering career services department.

Firms are also getting creative in the manner in which they hunt for talent. Janice Dilworth, HR manager at Mosaix, a software company based in Redmond, Wash., says that software recruiters now troll talent by making cold calls to Redmond's area code and work the four-digit phone extensions of company development groups. "However, we won't do that because we'd rather hire foreign nationals," explains Dilworth, who said it costs about $4,000 for them to sponsor an H-1B worker.

Alien-Nation

Sanjay Kehra came here on an H-1B visa to work as an IT consultant for Cisco. He's in the process of getting his green card but sees flaws in the current system. "These people come to America on meager incomes and get stuck to an employer while they process their green card. There are lots of experienced people in America who have to leave the country because they run out of time on their H-1Bs."

Kehra also believes that one reason companies recruit foreign workers is to get inexpensive labor. Technically, the H-1B program is supposed to pay foreign workers a competitive wage. But Norman Matloff, a professor of computer science at University of California-Davis, says workers hired under the program are paid 15% to 30% less than U.S. workers with similar skills. Still other critics claim firms can train more American workers for some of the jobs they're filling with the visa program. The company that last year brought in the most foreign labor under the program, Mastech Systems of Pittsburgh, received visas for 1,733 employees -- about 80% of its domestic work force. The workers had only bachelor's degrees.

But Mosaix's Dilworth says the industry is too competitive to spend extra time training new hires. "We would love to train people," she said, "but the truth is, shareholders won't wait."

Some firms, recognizing that they must adjust their practices and structures, have responded. Wal-Mart, for example, is currently outsourcing its entire walmart.com unit to Accel Partners, a high-tech venture capital firm, realizing that its own core competency is not e-tailing or online-order fulfillment. Others, such as Barnes and Noble, have spun off e-business units to offer their workers the entrepreneurial trappings they've come to expect from a new economy company.

These are just a couple of ways that "clicks and mortars" can attract high-tech talent. However, the demand for talent does not end there. Although we have grown accustomed to thinking of foreign workers as only technical personnel, the H1-B regulations should be expanded to include managerial talent as well. Admittedly, this would prompt some people to grow concerned about fraud. But there are several advantages to such an expansion:

Clear criteria. Admitting managerial workers would force the government to create stringent criteria for admittance not only for incoming workers but for those already here. Right now the only litmus test is if the worker is technically qualified. That simple determinant can lead to complacency on behalf of the government. Admitting people with harder-to-define managerial skills would force stricter adherence and attention to criteria points.

More competition/innovation. Admitting workers with skills like business development, strategy, and the like, would increase an individual firm's output and innovativeness. It would also promote growth and competition among individual managers -- and the economy as a whole.